Wisconsin utilities settle with EPA over air pollution

MADISON, Wis. -- Wisconsin utilities have agreed to spend more than $1 billion to clean up aging coal-fired power plants under a settlement with federal regulators announced Monday

Under the agreement filed in federal court in Madison, the utilities will pay a civil penalty of $2.45 million for alleged violations of air pollution laws over the years.

Wisconsin Power & Light Co. and the other utilities also agreed to pay $8.5 million to fund a series of environmental projects over the next five years. The projects include a $5 million investment in solar power and a $2 million investment to boost power production at wind and hydroelectric projects in Wisconsin.

But the biggest item is the nearly $1.2 billion the utilities are spending to keep the largest of the coal plants operating by adding more modern pollution controls, the Milwaukee Journal Sentinel reported.

The settlement, in the works for months, was announced by the U.S. Environmental Protection Agency, the Sierra Club and Alliant Energy Corp., parent company of WPL.

The settlement primarily involves Madison-based WPL, but also includes utilities that co-own or previously co-owned coal-fired power plants with WPL. Others named in the settlement are Wisconsin Public Service Corp. of Green Bay, Madison Gas & Electric Co. of Madison and We Energies of Milwaukee.

"This settlement will improve air quality in Wisconsin and downwind areas by significantly reducing releases of sulfur dioxide, nitrogen oxide and other harmful pollutants," Ignacia Moreno, an assistant U.

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S. Attorney General, said in a statement.

The reduction in coal-fired generation prompted by the settlement will reduce emissions of pollutants linked to smog, asthma, heart attacks and premature deaths by 54,000 tons annually, the EPA said.

The agency alleged that the utilities had failed to comply with the Clean Air Act by not installing modern pollution controls at the time that they performed upgrades to the power plants.

The case is similar to those EPA has filed around the country and in Wisconsin. The agency reached similar deals last year with Wisconsin Public Service and Dairyland Power Cooperative of La Crosse, and a federal judge in Milwaukee approved a similar settlement for We Energies' coal plants in 2007.

Under the settlement, WPL has agreed to shut down its coal-fired power plant in western Wisconsin, on the Mississippi River in Cassville.

The agreement also requires that additional pollution controls be placed on one of the two boilers at one of Wisconsin's largest coal plants, the Columbia power plant near Portage, WPL spokesman Steve Schultz said.

Under the agreement, the utility has committed to repower, refuel or add environmental controls to power plants in Sheboygan and Portage. MG&E and WPS are co-owners of those two plants, while We Energies formerly owned part of the Sheboygan plant, known as Edgewater.

As part of the settlement, the Sierra Club agreed to drop lawsuits against the utilities that sought to have EPA move more aggressively to have the plants cleaned up.

"Over the last several years, Wisconsin has effectively begun to transition away from our oldest, dirtiest sources of coal-powered electricity and made way for 21st-century clean energy technology," Sierra Club organizer Jennifer Feyerherm said in a statement. "Today's settlement marks yet another victory for clean air and healthier Wisconsinites."

In a statement, WPL President John Larsen termed the settlement a "win-win" for the utility and the communities it serves, noting it's consistent with the generation strategy that the power company outlined last year. The company said at the time it was agreeing to shut down the Cassville power plant and the oldest boiler at the Sheboygan plant.